Homeowner’s Insurance Help in Boston (homeowners insurance, how much, houses)

[Baltic_Celt]

Hello -

I have more than a few questions on Homeowner’s Ins. My 75-yr old mom owns a wood-frame, 3-decker bldg in Boston. She lives in 1 unit, the other 2 are tenant units. I’ve handled most of her affairs, most of my life, but the one thing I’ve never been involved with is home insurance.

My questions are many, if someone could guide me in the right direction. I’m great at research, but don’t know where to begin:

1. Which state office handles regulations (if that’s the correct word), so that I may check out bldg limit coverage & liability limits? Is that the Atty General’s office? (She was referenced in a Boston Globe article, so I’m just guessing. My google searches only show agent’s companies & I admittedly am a bit in the dark, so it’s a bit challenging to know what to search for.) Does each state differ, so I should ask in the MA forum instead of here?

2. She swears that only 1 company will cover wood-frame houses. Her agent, who I think doesn’t have her best interest at heart (my opinion based on her attitude when she's spoken with him), told her this 30-yrs ago (probably as she wanted my mom to keep her as her agent) & she refuses to believe otherwise. This can’t be true. In a huge city with huge property values, wouldn’t everyone be scampering to cover these bldgs, regardless of building materials? The home value in this gentrified area has increased more than 5-6 fold in 10-yrs.

3. These questions are initiated by “someone” who called, told her they needed to see the house & when he arrived, told her where he wanted to go – cellar & her 2nd floor deck. Thank God he didn’t want to see a tenant unit this time, as I wasn’t here & she can’t enter, unless it’s an emergency, without 24-hrs notice. She panics in the face of authority & never gets any info about anything & most assuredly would have let him into a tenant's unit. I’ve asked if he told her which co he represented & she’s answered something different each time. This is why I now need to handle this. When I asked who “someone” was (from the ins co, some sort of inspector, agent), she has no idea. He just came to the door with authority & she let him in. Two months after the visit, her agent sent a letter saying her ins coverage is “seriously inadequate” & needs to be almost doubled. If she does as they suggest, raise her coverage, it will increase her yearly policy by $1K.

Note: Their value is correct. Homes here have been selling for $550-600K+ within days. I just think we have other agent options & would like to explore them, perhaps reducing her fees.

4. Are there ever discounts on the total fee for seniors?

5. If she does decide to stay with her agent, they told her to list the name & # of a person the inspector can contact. Why would an inspector need to contact her again, if he just inspected? Also, reverting to the previous question, is it “legal” for the insurance company/agent to inspect the property? I know in this case, he asked, she let him in, so the answer is yes. But, in the future, can she decline without risking cancellation of her policy? She said someone visits every 10-yrs. But, this letter seems to indicate that they expect to be visiting sooner.

6. Is her agent similar to car insurance, in that, my agent works with an ins. co., but I have to go through them to obtain ins? In other words, can I go directly to the insurance co's for my answers & her policy & bypass agents, or is there a reason I need an agent?

Thank you so much! Any answers, website info, book recommendations, etc. would be of great value to me & I really appreciate it! I know it's a lot of questions, but you can see how little I know about the subject & how much help I need.

Have fun… VV

[golfgal]

I am in the insurance business and you are right, it doesn't sound right. First, since most of the houses in the US are wood frames most insurance companies insure them.

It is possible that the insurance company sent an inspector to the property to make sure everything was up to date but usually that only happens on new business. If she has not had an adjustment on her property value for a while she should, you want your home insured for the replacement cost, meaning if your home burned to the ground, how much would it cost to totally replace your home to what it is today. It is possible that this agent does occasional inspections to keep the insured value up to date.

Discounts for seniors on homeowners insurance isn't common. I don't know any companies that do that. Discounts for defensive driving courses are common for car insurance though.

If your mom has questions about her policy they will direct her to her agent.

The state will have an Insurance Commissioner's office if you have general questions about insurance or complaints about your company.

[rubytue]

I can only help with one part: Mass Insurance Division. There looks to be a good FAQ under Consumer Services -> Homeowners Insurance -> FAQ. The same page with the FAQ also has a list of all the companies that offer homeowners insurance in the state.

But that whole thing sounds a bit wacky. Especially the bit about no one insuring wood frame houses. Like golfgal said, most houses in the US are wood frame!

Also, it is a good idea to get your insurance agent adjust your insurance every so often. Building costs change, and if she has been carrying the same coverage for 10 years, it is woefully inadequate. I had a good friend learn this over the past two years when an electrical fire burned her house down, and she found her policy (last adjust 5 years prior) would not cover the rebuilding costs of her house. Imagine losing everything you owned, and then having to front $50k just to get back to where you started. Note than building costs are not the same as property values, as property value includes the cost of the land (probably a big chuck on value in Boston).

That all said, shop around! This agent sounds like he may not be on the up and up. At a minimum, he has a not so great way of going about things.

[Baltic_Celt]

Golfgal -

Thank you for your help & PM. I did send you a PM, as well.

Ruby -

Great. Thank you so much for the link. Alot of useful info on the .gov site. You're both right, she's been underinsured by 1/2 the value of the house for 10-yrs. I didn't know this. She told me she hasn't increased the policy amounts, as she couldn't afford it. I think if I handle it for her from now on, it will also make her feel relieved.

She has no idea what her coverage is about & for instance, in the past 10-yrs, she's put on new $50K vinyl siding, new $12 decks & a new roof. I was under the impression that homeowner's paid for part of this, no? Isn't that part of what you're paying for, not just fire/element damage?

She's also had a tenant cause a fire in the plastic garbage can, from careless cigs which caught our house siding on fire, as well as part of the adjoining alleyway gate. She & the nextdoor neighbor split the cost of repairs, as he also has a tenant who caused cig fires (yes, plural) & they didn't know which smoker caused the fire. Neighbors told them not to tell the ins co as they'd raise rates, but I told her maybe that's because with the repairs, it might increase the value of the house? I have no idea, but I told her that she needs to find out the info from the source, rather than take it from those who may just be guessing.

I will find as much info as I can online & on the MA site, so that 1st I'll have an understanding of general home ins. Then, I'll have a better idea of questions to ask & what to search for & can begin to search out other agents for quotes. It will probably be helpful to visit her agent with a list of q's also. She doesn't have to pay the $1K increase until May 31, so I have a bit of time to search.

By the way, I've seen some co's that offer online quotes. Has anyone used these?

Thank you both for giving me a great foundation from which to begin searching.

Have a great weekend...VV

[golfgal]

Originally Posted by KittensPurr

Golfgal -

Thank you for your help & PM. I did send you a PM, as well.

Ruby -

Great. Thank you so much for the link. Alot of useful info on the .gov site. You're both right, she's been underinsured by 1/2 the value of the house for 10-yrs. I didn't know this. She told me she hasn't increased the policy amounts, as she couldn't afford it. I think if I handle it for her from now on, it will also make her feel relieved.

She has no idea what her coverage is about & for instance, in the past 10-yrs, she's put on new $50K vinyl siding, new $12 decks & a new roof. I was under the impression that homeowner's paid for part of this, no? Isn't that part of what you're paying for, not just fire/element damage?

She's also had a tenant cause a fire in the plastic garbage can, from careless cigs which caught our house siding on fire, as well as part of the adjoining alleyway gate. She & the nextdoor neighbor split the cost of repairs, as he also has a tenant who caused cig fires (yes, plural) & they didn't know which smoker caused the fire. Neighbors told them not to tell the ins co as they'd raise rates, but I told her maybe that's because with the repairs, it might increase the value of the house? I have no idea, but I told her that she needs to find out the info from the source, rather than take it from those who may just be guessing.

I will find as much info as I can online & on the MA site, so that 1st I'll have an understanding of general home ins. Then, I'll have a better idea of questions to ask & what to search for & can begin to search out other agents for quotes. It will probably be helpful to visit her agent with a list of q's also. She doesn't have to pay the $1K increase until May 31, so I have a bit of time to search.

By the way, I've seen some co's that offer online quotes. Has anyone used these?

Thank you both for giving me a great foundation from which to begin searching.

Have a great weekend...VV

There are two kinds of claims in the insurance industry, chargeable and non-chargeable. A non-chargeable claim is something you can't prevent, like hail damage and they are just that, non-chargeable. That means that your rates will not increase due to the insurance company paying out your claim. Your chargeable claims can increase your rates and you do want to be selective on which claims you do file but for a fire/siding replacement your rate will be increased LESS then what it cost you to fix the repairs so it is in your best interest to repair them. I can't speak for her specific claim but in our company had she filed that claim her rate probably would have increased about $40/year for 5 years, so about $200 total. If the claim was more then that, then she probably should have filed. She might lose a discount for being claim free as well, in our company that would equate to about $100 with the dwelling coverage she has.

Homeowners insurance DOES NOT pay for regular maintenance of a home. What insurance is for is to replace what is lost due to a hazard (fire, wind, hail, etc.). It is to indemnify you and return you to your previous financial position, meaning that if your house was worth $500,000 and you had a fire that completly destroyed your home, they would pay up to $500,000 to replace your home.

From what you told me in your PM, I don't know that I would shop for insurance for her. She is with a long standing company and seems to have a responsible agent. It wouldn't hurt to get some online quotes to compare rates but she probably has some nice discounts for being a customer for so long. Just make sure if she does switch companies that you investigate the various discounts, etc. I know one major company is offering a new business discount right now but that discount decreases each year so after 3-5 years you end up paying MORE then you would if you had stayed with your current company.

I think it would be in your best interest to take your mom in to her insurance agent, have them review all her coverages, make sure she is getting all the discounts she should and have her agent go over things with both of you so you can both get a better understanding of how all this works. I would also talk to her agent about the fires and depending on how long ago they were MAYBE consider filing the claim to recoup some of that money (it might be too late to file them).

[Baltic_Celt]

Thank you Golfgal. I've printed off all your info, as well as pdf files that Ruby recommended on the state site & will be reading everything over this week. I should have a good base knowledge of ins by then & will then do as you say & schedule an agent appt to go over whatever q's I have.

You've both been enormously helpful! Thank you so much!

Take care... VV